Guardianship or Power of Attorney: Who Should You Appoint?

As the U.S. population ages and the seniors’ mortality rate reduces, more families are obliged to take care of their elderly relatives. Statistics show between the years 2015 and 2050, people aged 60 years and above will increase from 12% to 22%. Therefore, more seniors have begun appointing guardians or giving power of attorney to make medical and financial decisions on their behalf. Courts establish guardianship while seniors appoint a spouse, friend, or relative who can execute the power of attorney. Here’s a detailed overview of their roles.

What is Power of Attorney?

This power grants an agent the right to make decisions on a senior’s behalf. There are two types of power of attorney: medical and general power of attorney. A medical power of attorney permits the agent to make healthcare decisions if you become incapacitated. A general power of attorney, on the other hand, allows the agent to make financial and all the other decisions on your behalf. As such, they can access your bank account, prepare and file your tax returns, sell property, and more. If the power of attorney is designated as durable, the agent’s power remains effective after you become disabled or incapacitated.

What is Guardianship?

If the elderly person doesn’t give any of their family members the right to execute the power of attorney while still competent and suddenly becomes disabled or incapacitated, a petition for guardianship is filed. The court first appoints a guardian ad litem to find out if the senior is disabled or incapacitated and needs a guardian. The appointee also recommends the most appropriate person to act as a care guardian. Please note that the law states that a guardian is subordinate to the individual exercising power of attorney. As such, the guardian is not conferred powers already given to the person holding power of attorney.

An individual can be appointed as a guardian of the senior’s estate or the person. The Guardian of the person is responsible for the incapacitated person’s safety, housing, and healthcare decisions. Guardian of the estate, on the other hand, takes care of the elderly person’s finances. Note they only have a right to spend the incapacitated person’s income not their assets. For example, a senior may enroll in i an anxiety counseling service, and their monthly income isn’t enough to cover the costs. The guardian should obtain court approval before using the senior’s or incapacitated person’s assets to pay the bill.

Why You Should Appoint a Guardian

While the appointment of both individuals seems similar, they have different rights and powers. The agent exercising power of attorney, for example, makes all the principal’s decisions until the senior becomes incapacitated or disabled. Also, the agent with the power of attorney can revoke their rights at any time. This means the appointment of an adult guardian is still necessary. Besides, financial institutions are hesitant to recognize the validity of the power of attorney where the agent is also older.

Many institutions follow the Golden Rule that states the person with the gold makes the rule. As such, the financial institutions are bound to ignore all valid arguments it’s required to follow under the Power of Attorney Act. Laws governing powers of attorney have also changed over time. The most recent amendments restrict the class of persons who can sign the power of attorney as witnesses. This means even owners of an elder care facility can’t witness the power of attorney whereas they could 20 years ago.

Another reason to file a guardianship is when the power of attorney is in conflict with the family members. For example, when the members believe the agent isn’t acting in the best interest of the incapacitated person, they may file for the appointment of a guardian. However, if an interested person (an individual who has been taking care of the incapacitated person) had already filed to be a guardian, they should first obtain a court order to revoke the other person’s power of attorney before acting in their capacity.

This is a brief overview of the differences between a guardian and an agent exercising the power of attorney. Understanding their roles is critical to appointing the right individual at the right time and avoiding conflicts.